Viewpoints from Jeremiah L. Paul, Esq.
Nobody likes to pay legal bills. Attorney billing should be straightforward – the attorney bills actual time engaged in service to the nearest tenth of an hour – unfortunately, that is not always the case. As a reformed Workers’ Compensation defense attorney turned consultant, I’m often asked to audit invoices when clients feel their panel counsel is over-billing. Here are five deleterious billing practices I regularly see and that every legal client/bill-payer should know.
1. Formulaic Billing
Instead of billing the actual time it took to complete a task, attorneys will sometimes bill per a predetermined formula. For example, they may feel that it is reasonable to bill 30 seconds per page for reviewing subpoenaed records. Instead of tracking and billing actual time, the attorney will simply multiply the total number of pages in the set by .50, then divide by 60 to reach the billable total.
Most often, these formulas are designed to calculate a higher than actual but still reasonable-appearing time. Most attorneys I worked with loved subpoenaed records because these formulas make it “easy” billing. One firm I worked for even billed all attorney letters based on the same per-page formula, no matter how little time the dictation took.
2. Block Billing
Block billing is when a timekeeper lumps multiple tasks together under a single billing entry. Attorneys typically use block billing when there are multiple billable tasks associated with a single event. For example, a hearing may require the attorney to review the file, prepare a brief, travel to and from court, attend the hearing, and draft a report to the client. If each task is billed under a single time entry, it is impossible to determine how much time was spent on each task and whether each task was reasonable. The lack of clarity lends itself to overbilling by making it easy to hide padded time.
3. Value Billing
Value billing is when the timekeeper bills how much they feel the task is “worth” rather than the actual time spent. I most commonly see value billing associated with form letters and pleadings. Rather than billing the time it actually took to update a letter they’ve regurgitated for the last fifty cases, they bill the “value” of the letter as if they drafted it anew.
4. Misclassified Tasks
Most attorney agreements provide differing rates for attorneys, paralegals and secretarial tasks. However, many firms will have attorneys perform lower-tier tasks to boost profitability by billing a higher than-justified rate. Others will bill for tasks that are considered non-billable per the client’s litigation guidelines, such as leaving voicemails or scheduling medical appointments.
5. Duplication
Duplicate billing entries are often unintentional and easy to spot. However, the unnecessary duplication of effort results in overbilling. A common example is when a paralegal or junior attorney bills to review and summarize medical records and then the handling attorney bills the full amount to re-review the same records in preparation for an event. A paralegal may bill an hour to draft a motion only to have the attorney bill another hour to re-write/revise the motion when it should have taken only an hour in the first place. Always look for duplication of effort when there is more than one timekeeper on a file.
Bonus – Punitive Billing
Although impossible to identify by reviewing an invoice—and completely unethical—I’ve known attorneys who have added extra time to their billing entries to punish their clients. One senior attorney I worked with had no qualms about doubling the time they billed if the adjuster asked a “stupid” question or otherwise upset them.
Be aware and curate your panels carefully! For a full assessment of your attorney panel, litigation strategy, guidelines and billing audits, contact the experts at EPIC.
Jeremiah Paul began his career as a Workers’ Compensation defense attorney before transitioning to risk management for a large, self-insured healthcare organization. He is experienced in complex, high-value litigation and claim management issues that uniquely challenge the healthcare industry. As a Workers’ Compensation Consultant, he specializes in advising self-insured and high-deductible programs on reducing claim inventory, reducing program cost, compliance issues, litigation management and streamlining processes.
EPIC offers this material for general information only. EPIC does not intend this material to be, nor may any person receiving this information construe or rely on this material as, tax or legal advice. The matters addressed in this document and any related discussions or correspondence should be reviewed and discussed with legal counsel prior to acting or relying on these materials.
